Social lending will take 10% of loans market in two years – Gartner
9 responses to “Social lending will take 10% of loans market in two years – Gartner”
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Coincidence. I just came across Zopa today; about an hour ago in fact and I checked to see how much I would repay on a £5k loan over a three year period. The total repayment would be:
£5603.65 @ 7.8%APR (inc. Zopa’s £25 fee)
However I carried out a search for the same loan on a comparison website and the cheapest was:
£5566.11 @ 7.1%APR
So marginally cheaper with the second option.
There was a piece in the Economist on social lending around Christmas time and they came to the same conclusion as yourself. It’s also available via their podcast somewhere too.
Have you seen this site?
http://www.elance.com/p/landing/buyer.html
This is going to be big I feel. Outsourcing your work with people bidding to do it. I’m going to test it out as I plan to get my blog updated a little. Some WordPress designers are charging $15 per hour. Compare that with the US or UK based designers and you’re looking at $50 – $60 per hour.
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Interesting.
A couple of thoughts re: a Zopa loan vs. cheapest loan rates out there – I think there’s not a standard Zopa rate, it varies depending on credit scoring / what people will be will to lend you. You could find when you put your loan out to tender that you’d get a lower rate.
Also, a friend of mine got a loan recently to pay a tax bill and they really preferred the experience of getting a Zopa loan – they felt like the experience treated them as a person, in contrast to the aggressive, impersonal approach of traditional financial services companies.
When they got the loan they received a list of the people they were borrowing from – they said that felt good. Human.
The eLance thing is interesting – very much in the spirit of The World is Flat, if you’ve read that. I remember similar approaches going awry in the bubble years, but this is still something that should work. The principle’s right – just getting the details and the critical mass right…
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Financial services is all about brand and service as well as cost, the banks have taken advantage of that for decades but the likes of MORE TH>N and First Direct are not the best rates but they generate huge consumer loyalty.
Just had a look at the link posted by Stephen D, there is another site that I know well, set up in the UK to match up tradesmen with people who need work doing to their house – let me know what you think.
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Here’s that piece in the Economist I mentioned:
http://www.economist.com/finance/displaystory.cfm?story_id=10026377
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All banks should make it a top priority to offer a fully featured online service with social and money mangement features. It’s such an amazing concept because all parties are better off. The individual social lender gets a greater return on their money, the borrower gets a better interest rate and the loan manager (zopa) gets a good return for relatively little risk or work. As they say, the best person to be in business is the middle man.
I don’t think it’s any surprise that watchdog’s customer satisfaction survey of UK banks found two internet banks at number one (smile and first direct). I think there is a massive opportunity for a single bank to dominate online banking by coming up with the most slick and fully featured online experience yet, problem is, will any of them? Or will a start up like zopa, mint or geezeo revolutionize how people lend, borrow and spend their money.
What’s next? How about a country? We’ve seen people club together to buy a football team, who wants to put a pound in and buy the isle of wight?
The abridged bank survey can be found here:
http://www.bbc.co.uk/consumer/tv_and_radio/watchdog/reports/insurance_and_finance/insurance_20080211.shtml -
Is the Isle of Wight a foreign country? I suppose they do do things differently there.
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Hey Antony. Nice post and good to see you’ve tried Zopa. I work with them in the UK. Giles the MD over at Zopa has just posted about the stats – http://blog.zopa.com/archives/2008/02/21/10-in-2010
We’d be interested to hear any feedback and always like to receive feedback so please do get in touch if you have any other questions, or just fancy popping in for a cup of tea.
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good post! hope to read more from you
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great post keep it up!
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